Time To Sell General Electric?

[james.hendrickson]

Hi Guys,

I am holding a modest amount of shares of General Electric (GE).

The company has recently been dropped from the Dow. So. I'm curious about the forum's thoughts.

1) What does this mean for the company?

2) To what degree does this constitute a sell signal?


From NPR:

When the Dow Jones industrial average was created more than 120 years ago, it included 12 companies. Nearly all of the names faded away long ago: United States Leather Co., Distilling & Cattle Feeding Co., Chicago Gas Light And Coke Co.

All but one: General Electric, which is finally being dropped from the now 30-company stock index in favor of the parent company of the Walgreens chain of pharmacies. The change, announced Tuesday, will take effect June 26.

General Electric was off and on the average repeatedly in its early years, but had been a fixture since 1907. Standard Oil descendant ExxonMobil is the next longest-tenured company, first added in 1928. All but two other companies, United Technologies and Procter & Gamble, were added after 1975.

NPR.org

[corn18]

The sell signal came a long time ago for GE. Don't base your decision on how much you paid. Ask yourself if you had no GE today, would you buy some? If no, then sell it and take the loss and move on.

[bjl584]

How much do you have?
Are you in the black or the red on it?
If you really believe in it, then buy it all the way to the bottom.
If not, you might want to sell and move on.

[msomnipotent]

I don't know why I was kind of sad when I heard they were booted. I would keep it unless you plan on claiming the loss. They are still paying a decent dividend, and the stock will probably go back up eventually. Just don't expect it any time soon.

[bjl584]

Your GE is popping 8% today.
Where are you with this investment?
Are you in the black?

[james.hendrickson]

BJ, I'm still in the red a bit on GE.

I caught an interview with the CEO of the Carlyle group on the Freakonomics podcast this weekend. He had some interesting things to day about the private equity industry, specifically that the long term returns for that sector are something like 15%. This is better than the overall return of the S&P 500.

So, I'm thinking about getting more exposure to those stocks - one I have right now that's doing well is Apollo Capital (APO).

[frugal saver]

I've been following this thread--I also own GE and have been debating selling.

I looked at my cost basis--nearly double my current value--and I'm selling it finally today.

Along with National Grid, which makes me crazy.

[jeffmem]

I bought a lot of GE at a higher price and as it has come down I have bought more. Right now my average is around $21 a share. I won't be selling it now, that is for sure. Remember that GE still has a dividend. It may take some years for it to get back, but frankly I think GE is still a good investment. But that is just me, you follow your own advice, never follow others. I just bought more the other day to bring down the average buy price. GE has been dropping for awhile, and I am hoping it won't drop too much more, but if it does, I will buy more to average down.

[frugal saver]

I bought a lot of GE at a higher price and as it has come down I have bought more. Right now my average is around $21 a share. I won't be selling it now, that is for sure. Remember that GE still has a dividend. It may take some years for it to get back, but frankly I think GE is still a good investment. But that is just me, you follow your own advice, never follow others. I just bought more the other day to bring down the average buy price. GE has been dropping for awhile, and I am hoping it won't drop too much more, but if it does, I will buy more to average down.

One of my main problems with GE is that most of the company that I invested in is long gone. Appliances, lighting--mainstays of homes everywhere--have all been sold. Aviation, medical imaging and oil & gas are their main components now, if I recall correctly, and they don't have the moat that they used to have.

I'm still leaning towards selling.